FORM 10 - Q/A
(AMENDMENT NO. 1)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarterly Period Ended December 31, 1999
Commission File Number: 0-20961
COMMODORE HOLDINGS LIMITED
(Exact Name of Registrant as Specified in its Charter)
BERMUDA
(State or other Jurisdiction of incorporation or organization)
N/A
(IRS Employer Identification Number)
4000 Hollywood Boulevard, Suite 385, South Tower, Hollywood, FL 33021
(Address of Principal Offices)
(954) 967-2100
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant has (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such short period that the registrant was
required to file such reports), and (2) been subject to such filing requirements
for the past 90 days
Yes [X] No [ ]
7,649,118 Shares of Common Stock outstanding at March 20, 2000
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital deficiency was $3,969,000, at December
31, 1999 versus working capital of $5,749,000 at September 30, 1999. The
Company's working capital deficiency was primarily due to the costs related to
renovations of the Enchanted Sun as well as negative cash flows from operations
for the quarter.
Cash flows from operations used $7,279,000 and $129,000 for the first
three months ended December 31, 1999 and 1998, respectively. Cash flows used in
operations consisted primarily of the loss for the quarter, increases in prepaid
expenses and other assets (due to the dry-docking of both the Enchanted Isle and
the Crown Dynasty) and an increase in restricted cash, primarily due to the
$4,500,000 deposit placed with the owners of the Crown Dynasty to secure the
charter of the vessel. This deposit was used as part of the downpayment for the
purchase of the vessel in January 2000. Cash flows provided by operations
consisted primarily of increases in customer and other deposits (due to the
addition of the Crown Dynasty), and increases in accounts payable (due to
payments owed on the construction in progress on the Enchanted Sun).
The Company's cash flow used in investing activities in the first
quarter of fiscal 2000 increased from that of the same quarter in the prior
fiscal year by $4,685,000. The primary reason for the increase was the capital
expenditures related to the renovation of the Enchanted Sun, which increase was
partially offset by the additional investment made by the Company's partner in
Albuferra in October 1999.
The Company's cash flow provided by financing activities was $642,000
during the three months ended December 31, 1999 as compared to $80,000 used in
financing during the three months ended December 31, 1998. The cash flow
provided in the quarter ended December 31, 1999 was primarily due to the
Company's drawdown on the remainder of the proceeds of the Nordbanken loan (for
the renovation of the Enchanted Sun), which was partially offset by the payments
the Company made on its various loans in the quarter. During the quarter ended
December 31, 1998, the Company refinanced the loan secured by the Universe
Explorer, which accounted for the increases in the principal payments and
proceeds from long-term debt during that quarter. The net proceeds from this
loan were approximately $1,100,000.
At December 31, 1999, the Company owed $30,902,000 pursuant the EffJohn
Loan, Key Loan, NationsBank Loan and Nordbanken Loan, which loans bear interest
at 6.97%, 9.14%, 7.30% and 7.79%, respectively.
On January 28, 2000, Crown Cruises of Panama, Inc., a wholly owned
subsidiary of the Company, purchased the 916-passenger cruise ship Crown Dynasty
(the "Vessel") from Crown Dynasty, Inc., a Panamanian corporation (the
"Seller"), for $86,200,000. Prior to such purchase,
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the Company operated the Vessel pursuant to a bareboat charter with the Seller.
The Seller granted the Company an option to purchase the Vessel as part of the
charter. In connection with the Company's exercise of its option to purchase the
Vessel, the parties agreed to apply the $4,500,000 security deposit under the
charter to the purchase price for the Vessel. The purchase price in such option
was determined through arm's length negotiations between the Company and the
Seller.
The Company financed its purchase of the Vessel through loans in the
aggregate principal amount of $51,720,000 from Merita Bank Plc, Christiana Bank
og Kreditkasse ASA, and Skandinaviska Enskilda Banken AB (publ), and through a
loan in the principal amount of $24,480,000 provided by EFF-Shipping Limited, an
affiliate of the Seller. Such loans are guaranteed by the Company and secured by
mortgages on the Vessel and certain other collateral related to the Vessel. The
Company also used the proceeds from the issuance of 11% convertible subordinated
debentures in the principal amount of $5,000,000 dollars and 11% Series B
Convertible Preferred Stock with a face value of $5,000,000 dollars to finance
the balance of the purchase price. The debentures and preferred stock are
convertible into Common Stock beginning twelve months after issuance at $4.0625
per share. Sales of the underlying Common Stock are restricted to not more than
25% of the total number of shares of Common Stock that could be issued upon
conversion per quarter, which amount increases if the Company demands
conversion, which it may do in certain cases. The Company also redeemed
$4,000,000 of Series B Convertible Preferred Stock at face value in connection
with the new issuances. The net proceeds from these financings, after reduction
for the redemption of the $4,000,000 of Series B Convertible Preferred Stock,
was approximately $81,131,000. The Company obtained the balance of the purchase
price for the Vessel from cash from its operations.
The Seller of the Vessel is an affiliate of EffJohn International,
B.V., the company from whom the Company acquired the Commodore Cruise Line
assets in 1995. The Seller operated the Vessel as a cruise ship between 1993,
when the Vessel was built, and 1995. The Seller then chartered the Vessel to
others for use as a cruise ship. Upon taking delivery of the Vessel pursuant to
the charter, the Company renovated and launched the Vessel as the first ship
operating under its premium Crown Cruise Line brand.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COMMODORE HOLDINGS LIMITED
(Registrant)
March 20, 2000 /S/ ALAN PRITZKER
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Alan Pritzker
Vice President, Finance and
Chief Financial Officer
(Principal Financial and Accounting Officer)
